Hood Canal Real Estate – Interest Rate Drop

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com

Interest Rates Move Lower:  The markets continue to suggest that there is indecision as to the future of market recovery. The stock market has roared back after a brief 10% correction and hit new historical highs this week. While those highs are incremental increases one would normally think that the bond markets would suffer pushing interest rates higher. The services and experts I watch have been suggesting that there is another rally pending in the bond market which would push rates lower. That looked like a good prediction as rates held ground during the stock market rally and moved back toward 18 month lows after a small move higher last week. The move lower in rates was largely caused by the Friday jobs report. While the numbers looked positive, the details suggest many of the jobs were created in low income sectors and included some holiday temp positions. The overall job numbers continue to suggest a tepid recovery with stagnant wages. This is holding down confidence in the economy by most market observers even though the stock market increases reflect strength among larger companies. Until the job market recovery gains in strength, the recovery in Real Estate will be muted. For now interest rates look to remain low and possibly move lower.

Industry News

"Every day you may make progress." Winston Churchill. The labor market has made great strides this year, as the economy has averaged 229,000 new jobs per month in 2014, the fastest pace since 1999. However, key details in the latest report show more progress is needed.
The October Jobs Report showed that 214,000 jobs were created, below the 235,000 expected. Of importance to note: a big percentage of the gains were concentrated in retailers, restaurants and bars—all of which typically increase ahead of the holidays.

On the surface, there was good news as the Unemployment Rate fell to 5.8 percent from 5.9 percent, reaching its lowest rate since July 2008. However, wage growth remains tepid, as hourly earnings rose by only 3 cents, with the year-over-year increase at just 2 percent. And the Labor Force Participation Rate (LFPR) came in at 62.8 percent, still near the lows last seen in 1978. The LFPR measures the proportion of working-age Americans who have a job or are looking for one, and it should be moving higher in a recovery.

In housing news, research firm CoreLogic reported that home prices, including distressed sales, rose at an annual pace of 5.6 percent in September. This was the slowest annual rate since August 2012, and well below the 11.8 percent gain recorded this past February. Housing price gains are definitely trending lower after their meteoric highs last year.

The bottom line is that home loan rates remain near some of their best levels of the year, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Real Estate Miscellaneous Stats

Northwest MLS Report For October: The new report summarizing October activity shows year-over-year gains in new listings, pending sales, closed sales and prices.
Northwest MLS members reported pending sales last month up nearly 6.9 percent from twelve months ago.  New listings that are coming on the market are receiving a substantially higher than normal sales activity in many market areas. More central markets are still experiencing a large backlog of buyers looking for homes while some outlying markets have seen a slowdown in competition for listings.
Although the pace of sales has slowed somewhat since June, agent managers say demand is steady, with about half of all new listings selling in the first 30 days. Last month,   pending sales of single family homes and condominiums outpaced the number of new listings. A comparison of total inventory shows a drop of nearly 3.7 percent from a year ago. At month end there were 23,501 active listings across 21 counties in the MLS database. That's nearly 900 fewer listings than the year-ago total of 24,391.
Statewide inventory at the end of October stood at 3.24 months, a slight drop from the previous month's figure of 3.7 months. In King County there is less than two months of supply, well below the four-to-six month level that many industry analysts use as a gauge of a balanced market. An exception to that is Snohomish county which had gains in inventory. As the selection expands, buyers who have been on the sidelines are being lured back into the market, according to MLS director John Deely, principal managing broker at Coldwell Banker Bain in Seattle. Deely observed  sellers are now seeing brisk activity and even multiple offers after adjusting their prices after they had languished on the market. This suggests buyers have become more sensitive to price and are watching inventory closely.
Closed sales were over 7500 for October. Prices on those sales were up 7 percent, rising from an area-wide median price of $271,000 to $290,000. Four counties reported double-digit price hikes, led by San Juan County, where prices jumped 18.4 percent, and Snohomish County, with a 17.4 percent year-over-year gain.
Brokers consensus is it is vital to property price listings under current conditions where buyer’s have been wary of recent price increases. Many buyers have to be selective and not enter in to bidding wars as student debt and down payment hurdles cap their ability to compete. Attention on listings suggests buyers are watching for level of interest before making offers hoping to stay out of competitive situations. This often does not work as others seem to do the same thing.
Northwest MLS brokers also commented on distressed sales and upticks in remodeling and new construction.
Local brokers point to the promise of increases in new construction by local builders, a positive economic forecast for the region, and more homeowners surfacing from being "under water" and now able to sell due to increase in appreciation. This creates conditions for 2015  gearing up to be as active if not more so than 2014.
Case Shiller August Report Indicates Changing Market :  Most recent housing numbers support what many agents have experienced over the last few months. Distressed sales are down, listings are up, listings are taking longer to sell, competition for listings has dropped and buyers are just not as urgent. As a result home values are increasing more slowly, Case Shiller reports that values in King, Snohomish and Pierce Counties were flat from July to August and were up 6.6% from one year prior. Some of the hottest markets slowed more dramatically such as major southern California cities and Las Vegas. While local price increases have slowed they are still robust. Most are concerned that continued price increases of 6% will slow the market because of affordability factors. Slowing Seattle area price increases have continued for the last 6 months and are likely to continue. Home prices in the area are now equal to August 2006 levels and are still 11% below peak values. Real Estate continues to be held back by slow job growth, slow wage growth, lack of equity for many potential move up buyers and lack of adequate first time buyers.

September Home Sales Surge in September:   Pending Home Sales in Western Washington surge 13% in September from the same time last year according to the NAR. Listings are also up so inventory only declined 1.2%. Market analysts suggest that there will be a leveling off but not a slow period  in our market activity as long as pricing increases stay at recent lower levels and interest rates do not rise. Our markets are currently out performing national readings. Closed sales for September also were up from last year by 4.6%. King County median value is up 9.5% from last year but, much of this could be due to the strength in the luxury market. OB Jacobi, president of Windermere Real Estate, noted luxury home sales in the Greater Seattle area have been very strong, with agents reporting stiff competition in certain segments of the market, especially for homes over $2 million. “I attribute this to Seattle’s economic boom, which is attracting an increasing number of high-paying, executive level professionals and international interest,” he remarked. Market experts stress the importance of not overvaluing a listing as buyers are informed about fair market pricing. King County supply is at 2.3 months and Snohomish County is at 2.8. International buyers, primarily from Asia, are a big part of local sales mostly on the Eastside. Home prices in Seattle 12% from 1 year ago to $517,000.00. Median prices in Bellevue is up 6.3% to $605,000.00 and Snohomish County was up 8.4% to $330,000.00. Stephen O’Conner with the UW Runstad Real Estate school expects the market to remain hot through the end of the year but says many buyers are still watching on the sidelines

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com